Friday, December 4, 2009

House Committee Examines How Federal Dollars Get to Local Veterans for Health Care

House Committee Examines How Federal Dollars Get to Local Veterans for Health Care

Democratic Congress Provides Historic Budget Increases for Veterans and Vows Transparency and Accountability for Taxpayers

Washington, D.C. - On Wednesday, December 2, 2009, House Committee on Veterans’ Affairs Chairman Bob Filner conducted a hearing to explore how the Department of Veterans Affairs (VA) determines its resource needs and executes its spending plans for providing local medical care for veterans. The hearing specifically focused on how VA Central Office distributes and tracks the federal resources and how oversight is conducted to ensure that federal dollars reach the various programs and initiatives at the local VA medical centers.

Congress has provided a significant increase in resources for VA medical care in recent years. Appropriations for VA medical care have increased over 40 percent from $29 billion in FY 2006 to $40 billion in FY 2009. Despite the robust budget increases, concerns have been raised that allocations to some local VA medical centers have either remained stagnant or have not been proportional to the unprecedented increase in overall funding for VA medical care.

Committee members agreed to send a joint letter requesting a Government Accountability Office review of the budget planning and allocation process to determine the resources needed to provide proper medical care to veterans.

“Federal funds may not be flowing to the local VA facilities in the most efficient and effective manner and this hearing is intended to scrutinize VA’s decision making process in order to promote efficiency and best serve our veterans,” said Chairman Filner. “This Committee has worked to provide America’s veterans with a budget worthy of their service and sacrifice and it is essential that these resources are dedicated to keeping the promises that our country has made to our veterans.”

Following the enactment of the Military Construction and Veterans Affairs Appropriations bill, VA distributes approximately 75% of the funds to each of the 21 Veterans Integrated Service Networks (VISNs) using the Veterans Equitable Resource Allocation (VERA) system, which essentially allocates funds based on where the veterans go for their health care. VERA makes adjustments to address such factors as patient mix, high-cost patients, geographic costs (for example, labor), research and education support costs, equipment and non-recurring maintenance activities. VA then delegates to its health care networks the power to make decisions on health care financing and service delivery, including most budget and management responsibilities concerning medical center operations. There are 153 medical centers in the Veterans Health Administration system.

A number of reasons were cited that affect the manner in which federal funds are delivered to local medical centers. First, VA must ensure that local needs and demands are met, while maintaining a certain level of centralization to ensure that dollars are spent effectively. Additionally, Members raised concerns that methods to share best practices between local facilities were not effective. Budget and management responsibilities concerning medical center operations are not standardized and, therefore, more difficult to fully account for.

Currently, resource allocations are based on the number of veterans seen in the region in the previous years. Members were concerned that this process did not offer adequate flexibility to the changing demographics of today’s veterans or sufficient responsiveness to the wide range of health care needs. Because funding levels are dictated by those veterans that seek care rather than veterans that are eligible for care, veterans that are unable to access the system are not a part of the VA’s decision making process. Members raised concerns that some rural veterans are prevented from accessing VA health care because of the long distances they must travel, often in poor health. Additionally, low-income veterans may not have the means to access their entitled health care benefits and thus, are not counted.

Filner concluded: “Under Democratic leadership, Congress immediately addressed the stagnant budgets that plagued the VA for decades; stagnant budgets which resulted in reduced access for veterans and a department that could not afford to reach out to veterans in need. Although President Bush undertook two military operations during his Presidency, resources remained restricted for the VA, thus inhibiting the agency from adequately preparing to care for the wounded warriors of the current conflicts. Now with appropriate funding levels, VA faces the enormous task to improve health care delivery to veterans who need it. This includes veterans from past generations, rural veterans, veterans in need of mental health treatment, and of course, wounded veterans from the current conflicts. Although the consequences of funding neglect cannot be corrected overnight, this Committee is committed to rigorous oversight of all aspects of veterans spending and operations to ensure long term fiscal responsibility, but more importantly to keep the promises made to our brave veterans.”


Panel 1

· Clyde L. Parkis, Former Director, VISN 10, VA Healthcare System of Ohio

Panel 2

· Rita A. Reed, Office of the Assistant Secretary for Management, U.S. Department of Veterans Affairs

· Michael S. Finegan, FACHE, Director, Veterans Integrated Service Network 11, Ann Arbor, Michigan, U.S. Department of Veterans Affairs

Accompanied by:

o William C. Schoenhard, Deputy Under Secretary for Health Operations and Management, Veterans Health Administration

o W. Paul Kearns III, FACHE, FHFMA, CPA, Chief Financial Officer, Veterans Health Administration


Prepared testimony and a link to the webcast of the hearing are available on the internet at this link:

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